T. Rowe brings OHA credit strategy to Aus wholesale investors

T. Rowe Price has inked a new distribution deal with Oak Hill Advisors (OHA) to expand the reach of its ‘multi-strategy credit approach’ and US$2 trillion global private credit universe to now include the Australian wholesale market.

Launched as an Australian Unit Trust, the T. Rowe Price OHA Flexible Credit Income Fund AUD (OFLEX AUD) combines the firm’s “best ideas” in one “multi-strategy” offering by tapping into opportunities across both private and public credit markets, including direct lending, junior capital solutions, asset-based lending, collateralised loan obligations (CLOs), special situations and liquid credit.

The fund is designed to deliver income by lending mainly to large-cap companies based in the United States and in a variety of industries. It will also further democratise the firm’s exposure to alternative credit opportunities to a broader set of investors beyond institutions.

“OFLEX AUD draws on OHA’s three decades of experience in credit selection, structuring, and prudent risk managementm,” Adam Nankervis, Melbourne-based Partner and Portfolio Manager at OHA, said.

“A core tenet of our investment process since inception has been a focus on downside protection and capital preservation, which has allowed us to successfully navigate multiple credit cycles. We believe the current backdrop, with secular tailwinds for private markets and the challenges from an uncertain rate environment, is creating exciting opportunities for flexible capital within alternative credit.

“Our dynamic approach allows us to capture these opportunities for our clients while maintaining a disciplined risk framework.”

The fund launch also expands OHA’s presence in Australia – with locally-based investment and client service professionals – and builds on the US$108 billion it managers in global alternative credit assets. T. Rowe Price acquired OHA at the end of 2021 and has actively focused on growing the firm’s presence in alternative investment.

“Unlike most existing offerings in the Australian private credit market, which see significant concentration in real estate and higher-risk property development, OFLEX AUD delivers broad exposure across a wide spectrum of sectors. This disciplined diversification is designed to help mitigate sector-specific risks, while enhancing portfolio resilience for Australian investors,” Darren Hall, Australia and New Zealand Country Head at T. Rowe Price, said.

“The launch of OFLEX AUD reflects growing local demand for sophisticated alternative credit solutions among advisers and family offices. By combining OHA’s renowned alternative credit investment expertise with T. Rowe Price’s established distribution network, we aim to expand access for high-networth Australian investors to diversify their portfolios with high-quality alternative credit.

“This partnership underscores our commitment to providing advisers and their clients with innovative investment options and local expertise, helping them navigate a changing market environment.”